Broadband summit doesn’t answer the money question

There was widespread agreement in the Internet church this morning when Sen. Amy Klobuchar brought to town the chairman of the Federal Communications Commission, Julius Genachowski:

Watchwords: High-speed access to the Internet is crucial for economic development; access should be universal across the nation; access should be totally open (net neutral). "The costs of digital exclusion are rising," Genachowski told a gathering at the University of Minnesota's Carlson School of Management. "This is as important to the U.S. in the 21st Century as electricity was in the 20th Century."

But, oh, those unspoken details can be so troublesome.

As panelist Tim Lovaasen, president of the Minnesota Communications Workers of America, said, "It's going to take a lot of money to build out this system." The estimate he cited was $320 billion.

A big part is coming from private industry, but what about remote places? Bruce Kerfoot, owner of the Gunflint Lodge up the Gunflint Trail from Grand Marais, noted he hasn't had a foreign visitor yet this year. He and his wife booked a vacation in two minutes at a remote little village in Switzerland but, he said, nobody in Europe can do that at his lodge because Internet access is so poor.

For Kerfoot and others in Cook County, there seems to be a good chance one of the last rounds of federal stimulus money will come through in the coming weeks.

But what about others who didn't hit the stimulus jackpot? Klobuchar's answer after the session was, first, there will continue to be U.S. Department of Agriculture money for some and, second, it's crucial for Congress to allow taking money from the somewhat arcane Universal Service Fund (USF) to pay for other broadband projects.

The USF was designed years ago to charge the nation's phone customers a fee that goes into a pot to pay rural telephone companies to run phone lines where it otherwise would not be economic. Under Genachowski, the FCC is proposing to convert that from phone lines to broadband extension. Makes sense, but again, those details.

Kevin Beyer, general manager of a couple western Minnesota rural telephone companies that have been aggressive on broadband, said afterward that he worried about a couple things. First, his cooperatives need the USF money they get now to continue paying off bonds on lines they've already built, lines that serve both phone customers and broadband customers. Why should he be penalized because he was serving his customers ahead of the curve? he wonders.

And second, the way a lot of rural phone providers read the FCC proposal, it would lessen the urban-rural distinction that exists in the USF now, meaning that big private carriers like Qwest and Comcast, already huge profit engines, could begin to tap into it.

And there's a third thorny detail caught up in the proposal to free that money up for Internet access.

Call it the ultrasound problem.

Genachowski explained that while the FCC wants 100-megabit/second service to be the national standard, there simply isn't enough money in the USF to make that speed truly ubiquitous.

Therefore, the FCC is arguing, a newly arranged USF should spread the available money around in ways to at least get 4-megabit/second in all rural areas. It would be something to build on. He and Klobuchar have a fight in Congress just to get that, they say.

Rick King, chief technology officer for Thomson Reuters and head of the governor's task force that studied Minnesota broadband needs, noted during the panel discussion that remote medical service will be one of the handful of Internet accomplishments that will really drive its importance home to the entire country. A doctor at Mayo Clinic reading the ultrasound of an unborn baby in a small town in northern Minnesota represents perhaps the most speed-demanding of such applications.

Said Beyer: 4 megabits/second won't get you the ability to read a live ultrasound. It would make some rural areas second class.

So, say there were widespread acceptance beyond the auditorium this morning of the crucial importance of high-speed Internet access. (There isn't, says a recent Pew poll.)

For communities in Minnesota whose residents and businesses rely increasingly on improving their broadband access, a lot of details would still stand in the way, most of them with dollar signs on them.

By the way, one panelist was Pam Lehmann, economic director in Lac qui Parle County. Here's how she, Beyer and others pulled in a stimulus grant for broadband.

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How significant is the lack of universal coverage in Minnesota? Bernadine Joselyn of the Blandin Foundation told the audience the new numbers from an annual survey done by the Center for Rural Policy and Development in St. Peter:

In outstate Minnesota, 75 percent of households have computers. Of those, 94.5 percent have the Internet. Of those, 91 percent have broadband. Multiply it out and 64 percent of outstate Minnesota households have high-speed access at home. That's up from 27 percent five years ago.

Not bad, perhaps, but not universal. Age and income are the big factors in preventing advances in education, telemedicine and other fields from getting to everyone.

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